Which of the Following Statements Regarding Annuities Is FALSE

question 52

Multiple Choice

Which of the following statements regarding annuities is FALSE?

• A) PV of an annuity = C ×
• B) The difference between an annuity and a perpetuity is that a perpetuity ends after some fixed number of payments.
• C) An annuity is a stream of N equal cash flows paid at regular intervals.
• D) Most car loans, mortgages, and some bonds are annuities.

---

Definitions:

Highly Liquid Investments

Investments that can easily and quickly be converted into cash with little loss of value.

Petty Cash Fund

A modest sum of money held in reserve for small or unplanned expenses.

Cash Replenishment

The process of refilling a petty cash fund to its designated level after it has been depleted through use.

Journal Entry

The basic record of a financial transaction in an accounting system, noted by debits and credits to various accounts.